Faced with the immediate threats-of international tensions and economic recession-it is easy for the nation to overlook future workforce conditions that threaten the health of our economy. This American Assembly calls on America’s civic, education, labor, and business leaders to understand and address this looming crisis, which threatens the nation’s prosperity and democratic future.

This Assembly thinks it is especially important for private business to play a leading role in this effort. For more than thirty years, a variety of efforts have attempted to increase support for traditional workforce development activities. Those efforts have experienced, at best, mixed success, in part because the business sector did not perceive that the system met its needs for trained and productive workers and small and medium-sized firms were not organized and supported to participate effectively in the system. If there is one lesson that successful workforce intermediary efforts have taught us, it is that business sector involvement is critical to success. This has been demonstrated by Project QUEST in San Antonio and elsewhere, and will prove true for any national effort to address these issues.

Business leaders, who create jobs, must be actively and immediately approached, invited and tasked to become key actors in local, state, and national consciousness-raising efforts. This effort could take the form of a national commission, a business-led summit, a major public awareness and media campaign, or any and all of these. This Assembly thinks these issues should be immediately debated and made part of the public policy agenda.

At the same time, given the realities of competing pressures that make it hard for this issue to be heard, this Assembly also recommends the following steps.

The current disjointed policy environment creates a multi-faceted problem, including funding streams that are not aligned, and have difficulty achieving meaningful results. Concerns have been expressed from many fronts, including businesses, community-based organizations, educational institutions, unions, and government agencies.

Addressing this workforce development problem will require:

Broadening the focus of public workforce development to provide both job applicants and incumbent workers with the skills training needed for competitiveness and career advancement in a technologically driven, globalizing economy. This requires flexibility, meaningful incentives and resources for companies, industries, labor, and business organizations to foster and engage in training, growth, and productivity.

Incentives aimed at encouraging business investment to hiring, training, and advancing low-wage workers need to be simple to receive, administer, and address the needs of employers and workers. For example, in Maryland, the state legislature appropriated $2 million for worker advancement training at a coalition of hospitals and other employers, leading to significant wage increases and promotions. In Philadelphia, Pennsylvania, contributions from sixty-one employers, belonging to a Taft-Hartley labor management trust fund under the leadership of the District 1199C Training and Upgrading Fund, matched $3 million in federal funds to prepare 1,500 incumbent, dislocated, and new workers for careers in high-skilled nursing and allied health.

Supporting industry-specific workforce development strategies, which engage the self-interest of key stakeholders within a particular industry that help to organize a complex web of public and private resources into effective workforce development programs.

Creating strategic economic development initiatives in states, regions, and localities that fully integrate workforce and economic development. Several states have led the way by developing such plans and integrating funding streams to support them.

Redesigning educational financing and regulations to support workforce development. Much of the available student aid and state support for post-secondary education does not address the demands of both workers and firms. Because community colleges and other post-secondary education institutions are critical parts of the workforce development system, this needs to change. Policy makers should consider the promising results from Individual Development Accounts and the Lifelong Learning Account demonstration, and important proposals to expand Pell grant eligibility, adult education supports, and other student aid programs, especially for less than half-time students. Community colleges and other post-secondary institutions are critical parts of solving this problem because of the pending need for technical skills, certificates, and portable credentials.

Maintaining and enhancing adequate work supports that enable workers to succeed and business to increase retention. Child care, transportation, health care, the Earned Income Tax Credit, and food stamps are essential to ensuring that no one who works should be in poverty and that workers can succeed and progress on the job. These supports should also be accessible and available for time spent in training.

Aligning the performance measures required by diverse funding streams to get real accountability while supporting career advancement goals. Although a great deal of work must be done to get the measures right, this Assembly commends current efforts to establish consistent outcome measures for diverse federal programs. Congress and the Administration should continue with this effort, making sure that their work reflects the real needs of business and workers. For example, many intermediaries, businesses, state and local officials, and others report ongoing difficulties and confusion around conflicting standards among the Workforce Investment Act (WIA), and other publicly funded workforce development programs (e.g. TANF, Perkins). These should be remedied in upcoming reauthorizations. Outcome measures in Temporary Assistance for Needy Families (TANF) must be revised to reward employment and advancement outcomes rather than just caseload reduction.

Developing new ways to capture the effects of workforce interventions on businesses, workers, and labor markets. While the current workforce system stresses the importance of actual customer focus, current measures do not adequately capture the benefits that accrue to employers by participating in this system. Several new efforts are under way by the Aspen Institute, National Governors Association, and others to develop and test new demand-side measures that begin to address this problem.

Although coordinating existing public and private funding will help make progress towards growing the workforce intermediary approach, coordination alone is not enough. There is a need for more resources to help intermediary organizations meet the pressing demands of businesses, especially small businesses and workers. Even the most exemplary organizations, which juggle multiple funding streams and provide high performing services to businesses and workers, face a daily struggle to finance their work. Because of limited resources, public agencies also face impossible choices between supporting required core activities, and intermediary approaches like strategic planning and employer engagement that would strengthen their work and the critical need for training.

Federal, state, business, and philanthropic dollars all need to be expanded, and new types of financing mechanisms should be developed. Specifically, this Assembly recommends the following financing improvements:

Expand and target federal, state, business, and philanthropic resources for necessary intermediary functions, such as labor market information, research and development, convening of stakeholders, and business services. New resources should be identified to support investments in intermediary functions -- including business services -- that will lead to better outcomes in the broad range of existing workforce funding streams. This includes ensuring that the WIA and TANF are flexible funding streams that allow local actors to design programs that meet local needs. Policy makers should support a proposal to provide new resources for Business Linkage Grants and other employer services in TANF.

Develop ways to create long-term capital flows by leveraging relevant employer investments, such as contributions to Taft-Hartley funds and/or tuition reimbursement; existing tax credits; social venture funds and other financial innovations. The relevance and applicability for workforce development of a tax credit strategy, such as the Low Income Housing Tax Credit model, should be studied. Financing is an important topic for foundations, and their support of Living Cities, formerly National Community Development, is a model that could be adapted.

Connect permanent sources of public financing, such as infrastructure spending, to workforce development. For example, in several communities, port authorities provide stable investment in workforce development and career advancement tied to their infrastructure spending. Likewise, bond financing for the Pennsylvania Convention Center in Philadelphia has generated a resource that supported training in the hospitality industry.

Implement major comprehensive federal, state, and private sector demonstrations of the workforce intermediaries approach. This Assembly endorses recent efforts by the Department of Labor to create Regional Skills Alliances, help workforce boards and other workforce intermediaries begin industry-specific workforce development projects, assist health care employers address worker shortages, and expand the role of employer associations in providing intermediary services through the Workforce Innovation Networks (WINs) project. These types of demonstrations should be continued and expanded, and include partners from the philanthropic community, as WINs has since its inception.

Organizations that successfully carry out these strategies conduct a dizzying range of activities to achieve their mission. They coordinate or provide training, work closely with employers, study their local and sectoral economies and labor markets, and link workers with support services like childcare. They do this in an environment where they must constantly seek funds from a variety of sources, each of which has its own demands for accountability and reporting. These demands would challenge the most sophisticated organization. Achieving higher impact, both for the specific organizations and for the system as a whole, will require investments in capacity building, like the following:

Invest in the adaptive capacity of organizations to learn, function, and innovate, developing the ability to effectively serve both workers and businesses. The Annie E. Casey Foundation’s Jobs Initiative and the Aspen Institute’s Sectoral Employment Development Learning Project (SEDLP) are good examples of building the long-term capacity of workforce organizations to use outcome data to shape their work.

Develop technical assistance capacity to help organizations in fostering intermediary functions. Public/Private Ventures’ Working Ventures program, a training series for workforce development professionals, has shown both the value of and the unmet demand for this type of service.

Help develop the entrepreneurial skills and competencies of workforce development professionals, not only in meeting the needs of their customers, but also in running their organizations. National centers in higher education, vocational education, and community development have contributed to the professionalization of those fields, and a similar effort is needed in workforce development.

Build the field by linking leading intermediaries into regional and national networks to foster innovation, provide peer learning, and develop a clearinghouse for innovative practice. Good examples include such efforts as the National Network of Sector Partners, which has created learning forums and a peer technical assistance fund for sector programs around the country, and the AFL-CIO’s Working for America Institute, which has successfully stimulated new labor/management partnerships and expanded existing partnerships to serve the interests of low-wage workers and businesses. These networks should distill and disseminate the lessons learned from decades of the nation’s investment in the military addressing training and career advancement needs of highly diverse populations.

Build marketing and communications capacity of the organizations. Leaders and staff need to learn to speak the language of business and frame organization-appropriate messages that counter negative employer perceptions and therefore stimulate interest in partnerships.

Although it is critical for the nation’s future economic success, workforce development has not been a national priority. In part, this is because of competition for public funds and attention, but also because of a perception of poor training results and little understanding or knowledge of the emerging successes. Paradoxically, the broad tasks of advancing workers, increasing business productivity, and enhancing regional competitiveness span so many institutions and stakeholders that they inhibit the necessary attention and public support. As the nation strives to build a more effective workforce development system, the workforce intermediary strategy can serve as an effective way to simplify the system for both business and workers, and foster their long-term advancement. Part of the strategy for achieving this success is building a broad constituency for action. Building that constituency requires:

Engaging business as a driving force in support of this effort;

Building new coalitions and alliances across traditional dividing lines, especially in states and regions. In Massachusetts, the Direct Care Worker Initiative, led by the Paraprofessional Healthcare Institute, brought together employers, business, consumers, unions, and the workforce training community to advocate for enhanced wages and upgraded training for health care workers. These types of alliances will need to be expanded to have the high impact that is necessary;

Engaging political leadership at all levels. The issues raised in this report merit attention from such organizations as the National Governors’ Association, the U.S. Conference of Mayors, the National Association of Counties, and others to inform political leaders at all levels about what workforce intermediaries can do;

Expanding the voice of the workforce development community. At the local, state, and national levels, the Workforce Alliance is providing valuable leadership in increasing the presence of the workforce development community in policy and legislative discussions;

Emphasizing workforce development as an essential element of economic policy at the federal, state, and local government levels. This includes forging new alliances that integrate workforce development goals with those of economic development organizations, including the Council on Competitiveness, the Economic Development Administration, the International Economic Development Council, and the National Congress on Community and Economic Development, and the Community Development Venture Capital Alliance.

Expanding relationships with higher education organizations to create support for these workforce development initiatives. It is critical that groups such as the American Association for Community Colleges and other members of the American Council on Education, as well as the League for Innovation, engage their members in activities that transform post-secondary education in support of the nation’s workforce system.

Mobilizing a broader spectrum of foundations. Regional, local, and national foundations that have invested in workforce development should continue their leadership and seek to engage other funders in support of this agenda. One promising start is an emerging group of sixty local and national foundations with an interest in workforce development that have come together under the auspices of the Neighborhood Funders Group. Another is the local funding collaboratives emerging in Baltimore, New York City, and Boston.

Strengthening local constituencies. In the Southwest, community organizations affiliated with the Industrial Areas Foundation not only pioneered one of the early pilots, but then built six more workforce intermediaries in multiple states. These and similar efforts should be supported.

Researching and documenting the nature and extent of current investments as well as the return on those investments to employers, workers, and the community. Expanded support for rigorous research that links outcomes with intermediary practices and documents the return on investment to employers, workers, and the community is needed. This research is essential for addressing misperceptions for documenting cases and context in which training works, and for justifying further public and private investment in these strategies.

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